Laurel Kays

Americans for Tax Reform President Grover Norquist sent the following letter to Congresswoman Diane Black (R-Tennessee), Member of the Committee on Ways and Means

On behalf of Americans for Tax Reform I would like to offer my support for H.R. 6439, “Keep the Forest and Farm in the Family Act of 2012.” This bill will revise the federal death tax to allow families who own farms and forest land to pay taxes based on their land’s use value rather than its market value, thus allowing many family owned land areas to remain family owned.

One of the many issues with the federal death tax is the fact that it often forces individuals who are land rich, like farmers and forest landowners, to sell their resources to pay the tax. When land is evaluated for death tax purposes, it is evaluated for fair market value, causing the tax burden on the land to far exceed what families have in cash assets. For many families, this means that farms or land they have owned for many years must be sold to pay the death tax.

Under H.R. 6439, the tax burden on these types of land will be evaluated according to the current use value of the land, provided the owners agree to continue working the land for 10 years. This change will not only allow families who would have previously had to sell off their land not only to keep it, but also gives them an incentive to continue to work that land.

Not only will this bill help landowners financially, but it will eliminate the incentive for timber land owners to prematurely cut to pay the death tax. Because of the burden of the current death tax, many timber landowners are forced to harvest timber too early or too much to pay the tax. This bill will allow landowners to manage their forests in a manner that is both profitable and environmentally sound.

The current economic climate is harsh enough without the federal government imposing additional tax burdens on family businesses. While Americans for Tax Reform continues to push for the full repeal of the death tax, this bill takes a step in the right direction, giving families a better chance at keeping their land across generations. We urge members of Congress to support landowners and pass H.R. 6439.

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Americans for Tax Reform President Grover Norquist sent the following letter to Congresswoman Diane Black (R-Tennessee), Member of the Committee on Ways and Means:

On behalf of Americans for Tax Reform, I am pleased to support H.R. 6299, which will establish Association Health Plans that offer businesses and consumers simpler, more affordable options for quality insurance coverage.

Association Health Plans (AHPs) offer a number of advantages that other solutions, such as the faulty Consumer Operated and Oriented Plan (CO-OP) created in Obamacare and repealed in this bill, simply cannot. Under an AHP, small businesses are permitted to self-insure and purchase insurance in ways that are currently only available to larger corporations. Some of these methods would allow small businesses to avoid costly and cumbersome government regulations that drive up the cost of insurance for both owners and employees.

Unsurprisingly, research has shown that AHPs provide quality healthcare coverage while also boasting lower administrative costs than conventional small insurance plans and Medicaid. Additionally, while plans like Obama’s CO-OP are rife with government oversight and intervention, AHPs are private plans that work within the existing market with insurers familiar with the intricacies involved.

AHPs have long been viewed as having the potential to improve the healthcare system. The House has passed bills aimed at implementing them in multiple Congresses going as far back as 2003. The Senate, however, has consistently failed to pass a similar bill and allow AHPs to become a reality.

Both parties recognize the need for reform in the healthcare industry. Yet government run plans such as CO-OP are neither effective nor financially sound. AHPs offer sustainable private sector solutions that will make affordable, comprehensive health insurance a reality for small business owners, their employees, and their families. We urge members of Congress to support these solutions and endorse H.R. 6299.

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As the all but certain September fight over the 2012 Farm Bill looms, Americans would do well to remember that despite the happy, “Got Milk” images we associate with dairy products, in every purchase of milk, cheese, yogurt, and other such products is an extra cost incurred by the government’s irresponsible dairy programs. These outdated programs inflate prices and put taxpayers on the hook for expensive subsidies while largely benefitting large-scale, high income farm operations.

•Federal Milk Marketing Order establishes four sets of products: liquid milk, ice cream and yogurt, cheese, butter and dry milk. Every month, the USDA sets a separate price for liquid milk in each of 10 established regions, with processors paying according to how it will be used. Each of the other product categories is given a nationwide price. This cartel system ensures limited competition and means that entrepreneurs are forbidden from selling below government mandated prices.

•Milk Price Support Program guarantees that the government will purchase any amount of cheese, butter, or nonfat dry milk from processors at a minimum price. This creates a steady demand and higher prices for dairy products.

•Milk Income Loss Contract Program distributes cash subsidies to milk producers when market prices fall below a set limit. This program is the newest of the dairy programs, enacted for the first time in 2002.

•Tariff Rate Quotas impose a higher tariff rate on imports above a set volume limit. That limit is set at approximately 5% of US consumption, ensuring that US dairy producers are not threatened by overseas production.

•Dairy Export Incentive Program distributes cash subsidies to dairy producers who sell in foreign markets. This ensures that domestic producers have an incentive to sell abroad despite lower world prices.

Defenders of dairy programs will undoubtedly claim that they are necessary to support farmers and maintain a constant dairy supply. Yet an examination of the cost of these programs proves that any supposed “benefits” are enormously outweighed by their costs. The export program alone has cost up to $140 million in a single year, with all the dairy programs costing a whopping $222 million in 2012 alone. In addition to these outright costs which are shouldered by taxpayers, US consumers pay higher prices for dairy goods affected by government programs. Estimates found that US prices for butter are twice that of world market prices, while cheese prices were 50% higher, and nonfat dry milk prices were 30% than world averages. To add insult to injury, the subsidies which cost taxpayers and consumers so dearly only aided 158,730 farms from 1995-2011.

Despite these figures, the 2012 Farm Bill shows no sign of stopping expensive government intervention in the dairy industry. Representative Bob Goodlatte’s amendment, which would have ended the supply management aspect of the program, never escaped committee. The Senate version of the Farm Bill proposes to repeal price control and subsidy programs, only to replace them with another expensive bureaucracy. The proposed Dairy Market Stabilization Program would limit milk supply in order to increase demand for dairy products when market prices fall. It would also punish farmers at certain times for increasing production by funneling portions of their milk proceeds to the USDA to purchase dairy products in order to keep prices high. New regulations associated with the DMSP would also add anywhere from hundreds of thousands to millions of dollars in additional costs of dairy producers

Spending millions in taxpayer dollars and higher consumer costs to benefit a relatively few farmers is neither fair nor sensible. While the dairy industry is certainly important, the government’s current anti-free market, cartel control is simply a poor solution. While a better solution does not seem likely in the 2012 Farm Bill, Congress would do well to look for free-market friendly techniques that benefit both industry and everyman.

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According the USDA estimates, the United States will use approximately 11,885,000 tons of sugar in fiscal year 2012-2013. Yet despite this incredibly large and ever increasing use of sugar, few Americans are aware of the economic price we pay for the government’s cartel-like control of the US sugar market. With Congress expected to reconsider the 2012 Farm Bill when it returns to DC in September, it is important to understand how this control operates and the economic harm it causes to US interests.

Sugar prices in the United States are kept artificially high through a 3-part system of economic controls. First, the government imposes a rigid quota system on sugar production. Currently, 54.35% of US produced sugar must be beet sugar, while the remaining 45.65% is produced from sugar cane. Each state and sugar company is then assigned a production quota based on a complicated formula decided upon by the USDA. This cartel structure makes it illegal for producers to sell sugar that exceeds their given quota. The government further controls the sugar market through a two-tiered tariff system that allows US growers to provide about 85% of the market and keeps prices artificially high. Quotas are set for both beet and cane sugar imports, and those selling under that quota are charged a lower tariff than those selling above it. Finally, the federal government operates a complicated loan system to ensure sugar prices do not fall below a government-mandated price floor. The USDA loans money to sugar processors, with the sugar being counted as collateral for the loan. Processors in turn agree to pay sugar growers a minimum price. If the market price of sugar rises, processors can sell their sugar on the market in order to repay the government loan. If it falls however, processors can forfeit their sugar to the government rather than repaying the loan. In this manner, the price of sugar is guaranteed for both growers and processors.

These market control methods work out very well for the approximately 4,700 United States sugar growers who benefit from them. For millions of US consumers, taxpayers, and workers however, the costs of these policies far outweigh any benefit. Analysts estimate that US consumers and businesses pay anywhere from $3.5 to $4.5 billion in higher costs due to the government’s inflation of sugar prices. Taxpayers too, shoulder the burden of the government’s intrusion in the sugar market. The Congressional Budget Office estimates that the surplus sugar the government buys and sells, at a loss, to ethanol producers, will cost taxpayers $374 million over the next decade. Such a figure does not include the cost of personnel and resources to oversee and manage the government loan, tariff, and quota programs. Despite these figures, proponents of current protectionist sugar policies claim that they are necessary to save jobs. Yet for every job in sugar production that would be lost without government programs, an estimated 3 jobs in manufacturing are lost due to the costs imposed on manufacturers by artificially high sugar prices.

As clear as the evidence is against current sugar programs, the 2012 Farm Bill does not seem to have any real promise of eliminating or decreasing government control of the sugar market. Rep. Bob Goodlatte introduced an amendment to the House Agriculture Committee which would have limited price supports and import restrictions on sugar. For example, higher tariff fees implemented in the 2008 Farm Bill for imports over USDA quotas would have been eliminated. Such a step towards a more free-market sugar industry however was defeated soundly before it even escaped committee. A similar amendment introduced in the Senate by Sen. Jeanne Shaheen was likewise voted down.

Baltimore residents planning picnics, barbeques, and parties for July 4th celebrations should prepare to cough up a little extra for future festivities. Despite the fact that a whopping 34.77 percent of the costs associated with July 4th already go to cover government fees and taxes, the Baltimore City Council has voted to make commemorating Independence Day even more costly for hardworking Baltimore taxpayers. Mayor Rawlings-Blake and the Baltimore City Council approved a measure last week that imposes a three point, 150 percent bottle tax increase. This five cent per container tax comes on top of the income tax increase that Maryland Governor O’Malley signed into law this May, as well as the many other taxes that make Maryland residents’ tax burden 12th highest in the nation.

As a result of the bottle tax hike, Baltimore residents and visitors will now pay more for soft drinks, alcohol, water, and juice. Mayor Rawlings-Blake and the City Council forced this unnecessary tax hike through despite protests from vital area employers such as Safeway and Coca-Cola, who contended that the tax will endanger area jobs. It should be noted that the original two-cent bottle tax was passed in 2010 under the pretense that it would be temporary, yet adding insult to injury, this sunset provision was also scratched last week, making this unnecessary and annoying tax permanent.

Baltimore’s onerous tax burden has already resulted in out-migration from Charm City. According to 2010 census data, the city is losing an average of 100 people per month as citizens flee to areas with a more hospitable tax climate. Baltimore’s property tax rates are the highest in Maryland, a state notorious for burdening its people with the cost of its bloated government, a burden evidenced by the income tax increase the legislature passed in May.

With this latest round of job-killing tax increases at the state and local level, consumers and residents are more inclined to flock to counties and even states where the government does not reach so deep into their recession-lightened wallets. With the exception of Pennsylvania, Maryland’s neighbors - Delaware, Washington, DC, and Virginia, all place less of a tax burden on their citizens, giving consumers and employers ample opportunity and incentive to live and do business elsewhere. This incentive to flee Baltimore will only be bolstered by Mayor Rawlings-Blake’s ill-conceived bottle tax hike.

Proponents of the bottle tax claim that it will help finance the Mayor’s plan to revitalize Baltimore City schools. Yet even if the tax raises the $10 million it is projected to (doubtful considering the original tax fell $1 million short of revenue projections), such a figure barely skims the surface of the exorbitant $2.8 billion dollars that reports estimate is needed for the Mayor’s school revitalization plan. Just like the numerous ObamaCare tax hikes, and Gov. O’Malley’s recent income tax hike, the Baltimore bottle tax is short-sighted and economically adverse money grab from big-government officials. Allowing the tax to stand will only reduce the job-creating capacity of small businesses and hamper crucial efforts to revitalize the City of Baltimore.

With the Utah, Colorado, and Oklahoma primaries taking place Tuesday, Americans for Tax Reform has released an updated list of incumbents and challengers for state legislative office in each of these states who have signed the Taxpayer Protection Pledge. These candidates have made a written commitment to their constituents to oppose any and all efforts to increase taxes. ATR strongly encourages taxpayers to consider those who have made this commitment when they vote on Tuesday, June 26. The list of incumbents and challengers who have signed the Taxpayer Protection Pledge and will be on the ballot Tuesday is as follows:

California Lt. Gov. Gavin Newsom and other politicians gathered in Sacramento yesterday to commemorate California’s annual Small Business Day. Conspicuously absent from the discussion and media coverage however, was the adverse impact that Gov. Jerry Brown’s tax hike package would have on small businesses in California if passed in November.

Gov. Brown, President Obama, and their ilk love calling for higher taxes on upper incomes in the name of “fairness” and raising revenue. Yet what they conveniently forget to mention is that raising income taxes, especially on upper income brackets, does great harm to the small businesses that are the backbone of the American economy. That’s because the individual income tax system is the one under which small businesses profits face taxation. Thus when Gov. Brown and President Obama talk about their proposals to raise taxes on “the rich,” they are really talking about raising taxes on small businesses and reducing those businesses’ ability to create jobs.

According to IRS data, of the nearly 6.6 million individual income tax returns filed in California in 2010 (the most recent year for which data is available), over 3 million of those returns were small businesses. However, this figure only reflects sole proprietors. When the share of small businesses made up of S-Corps and partnerships is factored in, it turns out that upwards of 3.8 million small businesses file under the individual income tax system in California and would see their taxes go up if Gov. Brown’s income tax hike passes this November. Gov. Brown is also seeking to add insult to injury with his proposed sales tax increase. For information on how sale tax increases disproportionately harm small businesses, click here.

Under Governor Brown’s initiative, these businesses would see a sizable increase in their already heavy tax burden. The California Legislative Analyst’s Office predicts that Gov. Brown’s proposed income tax hike will siphon $33.8 billion from the private economy over the next six fiscal years. Keep in mind that President Obama’s budget calls for higher taxes on the majority of small business profits. If both he and Gov. Brown have their way, it’ll be a rough year for small businesses throughout the Golden State. California small businesses simply cannot afford such an onerous rate increase when operating in a state that already possesses the second highest income tax rate in the country.